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These are trying times for indigenous petroleum producers- Fatona

With many challenges – pipeline vandalism, crude oil theft, lack of funds and others – the indigenous oil companies are indeed going through very difficult times. In this interview with  Udeme Akpan, the Managing Director of the Niger Delta Exploration and Production Plc, Mr. Layi Fatona called for urgent government intervention.

Mr. Layi Fatona

Excerpt

What factors account for your rapid development and emergence as one of the leading oil and gas producers in Nigeria?

We do more than 7,000 barrels per day, bpd. Consider that we also produce about 45MM standard cubic feet, Scf/d of gas from the Ogbele field, with our equity share from the nearly 10,000 Bopd and 260 MM Scf/d of gas from the OML-34 JV. The factors for our development are essentially remaining focused, knowing and able to anticipate the trend as well as getting ready for tomorrow. All these are factors that have allowed us to sustain growth even at times when small Independent producers like us are doing everything to get going and remain afloat. I must admit, these are trying times for each and every one of us – Nigerian Independents Producers.

Can you comment on your personnel and technology?

We have a lean and hands-on, young and determined workforce. They are all not afraid of adopting new technology. But more importantly, we like to use tested and cost effective processes. These we deploy even more expensive technologies are available. Ours is to be nimble, effective and sustainable.

What are your plans in the short, medium and long term?

For the short term, our plans are to remain relevant in a nimble way, within the Nigerian exploration and production, E&P patch. As for the medium term, we like to prepare ourselves as an attractive investment vehicle, which is able to grow with steady injection of new capital periodically for each of our outlined phases of growth. Efficiently work our increasing portfolio of assets as we become a significant player in gas development in Nigeria. Gas, being the energy of the future and one that will take Nigerian through a much deserved industrial and energy sufficient growth phase will remain the way we shall nurture our growth.

As for the Long Term, we will in a sustainable way, evolve as a Pan African Integrated Energy Development company. Improving our foot print away from the shores of Nigeria, into the vast emerging low cost of entry, Sub Saharan Africa region. This we shall do, in a way that brings substantial human capital development to each of the countries we invest, as well as value creating investments for the benefit of our increasing shareholders.

Are you planning to bid for marginal fields/blocks?

Bid for Marginal Fields/ Blocks? Perhaps not! The whole protocols of the process is too energy sapping, saddled with too much troubles and often with no results to show for the stress and efforts.

As of today and as a truly Independent Nigerian Company, we have demonstrated our capabilities in the way we have worked our small and medium sized assets. We shall however, make ourselves available not only as an efficient operator, but also as the ‘deserving Partner to have’, for and to any of those other companies or entities who intend to participate in the bid process. That will be after they have been successful and have an asset worthy of investment funds. However, were the process itself, presented in a way that is convincingly rewarding, no doubt we will opt to participate.

 What are your contributions to local content development?

I certainly don’t want to dwell too much on this. We as a company, Pioneered the local content development efforts in this country. Even right from the onset of our initial and flagship field development initiatives. It is on record we brought the capacity and capabilities of Indigenous Service Providers, in a hitherto unused and untapped way for Local Content to thrive. Most of the companies that facilitated the attainment of 1st Oil Production from the Ogbele Field were an array of Indigenous companies. I have always stated that the middle name of our company is ‘Local Content’. That had been the case since then and until tomorrow.

Can you comment on your Corporate Social Responsibility?

That is another one of our pioneering and enduring gifts to the Nigerian Petroleum Industry. When none existed, we put in place the Prototype Host Community Development Trust. With 5per cent of our profits flowing in into the trust, for development efforts and initiatives, driven and implemented themselves by the host communities under the direction of an Independent Board of Trustees, the initiative had earned us our License to Operate, writing our host communities. How else can we explain the fact that now into our 12th year of production, we have suffered no single day of production shut-in arising from host community induced disruptions. Even though this remains a work in progress, we continue to look for new ways to improve on the delivery of our Corporate Social responsibility initiatives.

What are the major challenges that hinder operations in the oil and gas industry?

Assuming that we can and will get over youth unemployment and pipeline vandalism, lack of long term investment capital, remains a limitation. It imposes on you a limit beyond which you cannot actuaries yourself.

These past many years, I note also what I consider as 3rd party induced limitations which you cannot control, becoming major challenges. Take for an example the outage of the Forcados Terminal for the past nearly 15 months. As an Independent Nigerian Company, hardly can any of us who produce into that facility is able to control its availability or otherwise. Yet, without it, many of us are walking corpses. It is the same for the Bonny Terminal. Last year alone, the Terminal was unavailable for a total of 140 days. Can we control that? Of course NO! So now you see the importance of factors which you cannot control as a major challenge.

How can these problems be tackled?

As I have said – simply put, Nigeria has no business Exporting Crude Oil or gas. We should be looking from the Terminal back to the well head. That is where our focus should shift. Produce Oil, process it to higher value products. Create opportunities for our people, and build a totally changed out New Nigerian Petroleum Industry. It is possible. Only there is need for Government and NNPC to champion the process. I believe we have the human capital and other resources to achieve this new thinking.


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